Lock Haven council debates dissolving water authority as funding, PUC timing loom

Lock Haven City Council spent the bulk of its Aug. 7 meeting debating a proposed ordinance that would transfer the city'''s water and wastewater systems from the Lock Haven City Authority to the city and dissolve the authority, amid concerns about grant timing, rate impacts and who would operate the system.

The ordinance, presented for first reading, would have the city assume financial and contractual obligations of the authority and terminate the authority under Pennsylvania municipal authority law. Councilors, authority representatives and residents repeatedly urged caution: several speakers said a hasty dissolution could delay design work for the Keller Dam project and other improvements, and that delay could increase construction costs.

"There are a lot of questions to be answered," a representative of the authority (Speaker 6) said when asked about contract transfers and who would execute pending grant work. The authority noted a pending DCNR (Department of Conservation and Natural Resources) application and that other state reviewers need clarity on who will sign grant documents.

Council members pressed staff and the authority over specifics. "If we start the first reading tonight and then have a second reading and then this is sent as a letter to other municipalities, we could be committing the authority before contracts and reimbursements are clear," one councilor (Speaker 4) said, urging more detail on transfer of assets and interim contract responsibilities.

Speakers also raised funding and reimbursement concerns. City staff reported the city paid about $189,000 from its water fund on Keller-related engineering costs that staff considers non-reimbursable to date. The city authority and representatives warned that suburban customers have yet to reimburse shared costs and that unresolved reimbursements could complicate any transition.

A primary policy question before council was whether to dissolve the existing authority and quickly form a new joint municipal authority with neighboring townships or instead expand the current authority to add those townships. Both approaches have trade-offs: forming a new authority could take longer and potentially delay projects, while expanding the current authority raises governance questions about representation and decision-making for city customers.

The Public Utility Commission (PUC) and state grant timelines added urgency. Staff noted that to pursue a PUC rate filing that could affect eligibility for certain PENVEST loans or state grants, the city would need to conclude its decision-making process by September to allow time for actuarial work and updated rate studies. "You would really need to make a final decision in the month of September," a staff speaker said.

Residents and councilors also debated alternative paths: one repeated suggestion was to have the city remain the operator as a contractor to a joint authority or to expand the current authority to include neighboring townships so projects could proceed without interruption.

Council deferred a final vote on the takeover ordinance; instead, members asked the subcommittee and staff to pursue follow-up meetings with neighboring municipalities and gather necessary legal and financial analyses before advancing the ordinance to second reading. The council directed staff to seek more information on PUC timing, outstanding reimbursements and the status of DEP and DCNR reviews for Keller design work.

Next steps: council asked staff to assemble the subcommittee and meet with representatives of the other municipalities within two weeks, clarify which interim contract expenses are reimbursable, and return with a recommendation ahead of the September application timeline.